Report: White House Officials Backed 2019 Pay Freeze, $300 Billion in Cuts to Employee Compensation

White House officials reportedly recommended that President Trump order a pay freeze for federal workers in 2019 and seek to eliminate the Federal Employees Retirement System defined benefit program for all new government hires, according to a leaked memo.

According to Crooked Media, the memo was sent from officials with the Domestic Policy Council, the White House's internal think tank, to the Office of Management and Budget for incorporation into the fiscal 2019 budget, which President Trump will send to Congress in February.

The memo contains a laundry list of initiatives touching many agencies and issues. Under the heading “Office of Personnel Management,” it describes implementing a pay freeze for federal workers in 2019 as “the most important” compensation proposal, as it is “the only one we can do unilaterally.”

Additionally, the memo advocates eliminating the defined benefit program available to feds through the Federal Employees Retirement System and barring new hires from access to the Federal Employees Health Benefits Program once they retire. It also calls on Congress to “enact all the FERS reforms for existing hires” laid out in Trump’s fiscal 2018 budget request.

Officials also want to slow seniority-based pay increases by 50 percent, eliminate the mandatory 25 percent floor on employee contributions to FEHBP premiums "to encourage greater competition . . . and reduce costs," and “bring federal paid leave benefits in line with private sector norms.”

The document claims that taken together, these proposals would save “over $300 billion over a 10-year period and would eliminate most of the federal compensation premium.”

It is unclear how much traction most of the proposals would gain in Congress. Lawmakers in the House and Senate are set to negotiate in the coming days on a budget resolution, where the two chambers differ on whether to implement Trump's previous proposals to cut federal employee retirement programs.

Crooked Media is a liberal news and opinion website founded in 2017 by former Obama administration staffers.

The published version of the memo is a “verbatim recreation,” intended to protect the identity of the source. The memo is undated, but it lists the point of contact on the OPM proposals as James Sherk, who left the Heritage Foundation to become the White House labor adviser in February, and makes reference to the fiscal 2018 budget, which was released in May.

Sherk, officials at the White House and officials at the Office of Management and Budget did not immediately respond to requests for comment.

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